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The International Finance Corporation has outlined plans to issue a 1 billion yuan bond in London, with the arm of the World Bank targeting international distribution for the issue.

IFC said today it would issue the bond, equivalent to around $165 million in size, next month. It will be the largest renminbi issue by a multilateral institution on the London Stock Exchange .

IFC vice president and treasurer Jingdong Hua said: “This issuance will help demonstrate the strong demand from international investors for offshore renminbi bonds, while providing an alternative source of renminbi funding for investment in the country.”

The body has previously issued panda bonds, or renminbi-denominated bonds, in China and dim-sum bonds in Hong Kong.

Chris Jones, global head of local currency syndicate at HSBC, which along with ICBC and JP Morgan is a lead arranger on the deal, said: "We've seen a number of deals with the moniker 'listed in London', a British kite mark rubber stamp.

"Whether or not they are or aren't, I don't think ultimately affects the success of a deal, but it is statement of the issuer's intention of what they'd like to achieve. This really means they are focusing on international distribution."

While the growth of renminbi-denominated bond issuance has been seen as a positive step in the internationalisation of the currency, demands for these types of bonds continues to primarily come from Asia.

When Caterpillar issued a renminbi bond on Monday for example, Asian investors took 95% of the issue, while BP's renminbi bond earlier this week saw Asian investors take 82%.

The UK and China agreed a series of steps last October to “cement London’s role as a global offshore hub for trading the Chinese currency the renminbi and act as the spring board for London to also become a hub for renminbi investment into China”, a statement from HM Treasury said at the time.

-- write to matthew.turner@dowjones.com or follow on Twitter @bmturner